STATE OF NEW YORK
________________________________________________________________________
8574--A
2025-2026 Regular Sessions
IN ASSEMBLY
May 21, 2025
___________
Introduced by M. of A. PHEFFER AMATO -- read once and referred to the
Committee on Governmental Employees -- recommitted to the Committee on
Governmental Employees in accordance with Assembly Rule 3, sec. 2 --
committee discharged, bill amended, ordered reprinted as amended and
recommitted to said committee
AN ACT to amend the retirement and social security law, in relation to
the limitation of overtime compensation in final average salary calcu-
lations
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Section 1203 of the retirement and social security law, as
2 added by section 1 of part A of chapter 504 of the laws of 2009, is
3 amended to read as follows:
4 § 1203. Overtime. A member's final average salary shall be calculated
5 in accordance with such provisions of article eight or article eleven of
6 this chapter as govern the member's benefits including overtime, except
7 that earnings classified as overtime compensation in an amount in excess
8 of [fifteen] thirty percent of a member's annual wages not classified as
9 overtime compensation shall be excluded from such calculation. "Overtime
10 compensation" shall mean, for purposes of this section, compensation
11 paid under any law or policy under which employees are paid at a rate
12 greater than their standard rate for additional hours worked beyond
13 those required, including compensation paid under section one hundred
14 thirty-four of the civil service law and section ninety of the general
15 municipal law.
16 § 2. This act shall take effect immediately.
FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
This bill would increase the limit on overtime compensation used in
the calculation of final average salary to 30 percent of annual wages
for Tier 5 and 6 members in the New York State and Local Police and Fire
Retirement System (NYSLPFRS). The current limit is 15 percent.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD08189-03-6
A. 8574--A 2
Insofar as this bill affects NYSLPFRS, the present value of benefits
would increase by approximately $331 million.
NYSLPFRS Increase in present Increase in required
value of benefits contributions
Actives Tiers 1-5 (Closed) $ 35.6 mn $ 50.3 mn
Actives Tier 6 (Open) $ 295.1 mn $ 280.3 mn
Total $ 330.7 mn $ 330.7 mn
Benefit improvements will be funded by increasing the billing rates
charged annually. The annual contribution required of all participating
employers in NYSLPFRS would increase 0.7% of billable salary, or approx-
imately $6 million to the state of New York and $27 million to the local
participating employers. This permanent annual cost will vary in future
billing cycles with changes in the billing rate and salary of the
affected members.
The number of current and future members who could be affected by this
legislation cannot be readily determined.
Summary of relevant resources:
Membership data as of March 31, 2025 was used to measure the impact of
the bill, the same data used in the Actuarial Valuations dated April 1,
2025. Distributions and other statistics can be found in the 2025 Report
of the Actuary and the 2025 Annual Comprehensive Financial Report. The
actuarial assumptions and methods used are described in the 2025 Annual
Report to the Comptroller on Actuarial Assumptions, and the Codes, Rules
and Regulations of the State of New York: Audit and Control. The fair
value of assets and GASB disclosures can be found in the 2025 Financial
Statements and Supplementary Information.
Assumptions, demographics, and other considerations may have been
modified to better reflect specific provisions of any proposed benefit
change(s).
This fiscal note does not constitute a legal opinion on the viability
of the bill, nor is it intended to serve as a substitute for the profes-
sional judgment of an attorney.
This estimate, dated January 28, 2026, and intended for use only
during the 2026 Legislative Session, is Fiscal Note Number 2026-38. As
Chief Actuary of the New York State and Local Retirement System
(NYSLRS), I, Aaron Schottin Young, hereby certify that this analysis
complies with applicable Actuarial Standards of Practice as well as the
Code of Professional Conduct and Qualification Standards for Actuaries
Issuing Statements of Actuarial Opinion of the American Academy of Actu-
aries, of which I am a member. I am a member of NYSLRS but do not
believe it impairs my objectivity.
